Judge: H. Jay Ford, III, Case: 22SMCV01412, Date: 2023-01-17 Tentative Ruling

Case Number: 22SMCV01412    Hearing Date: January 17, 2023    Dept: O

  Case Name:  11342 Waterford Street LLC, et al. v. Sall, et al.

SUBJECT:                SLAPP MOTION

MOVING PARTY:   Defendants Anthony Sall and Barbara Sall

RESP. PARTY:         Plaintiff 11342 Waterford Street LLC

TENTATIVE RULING

            Defendants’ SLAPP Motion is GRANTED. 

            “Litigation of an anti-SLAPP motion involves a two-step process. First, the moving defendant bears the burden of establishing that the challenged allegations or claims arise from protected activity in which the defendant has engaged.  Second, for each claim that does arise from protected activity, the plaintiff must show the claim has “at least ‘minimal merit.  If the plaintiff cannot make this showing, the court will strike the claim.”  Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009 (where moving party seeks to strike an entire cause of action alleging multiple factual bases, court does not determine whether 1^st prong is met based on “gravamen” test but must determine whether each factual bases supplies the element of claim or merely provides context). 

I.  Defendants satisfy the 1^st step of SLAPP

            All parties concede that the 1^st step of SLAPP is satisfied.  Malicious prosecution arises from a defendant’s exercise of the right to petition and implicates CCP §425.16(e)(1).  See Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735; see also Rusheen v. Cohen (2006) 37 C4th 1048, 1063 (abuse of process claims automatically subject to SLAPP).

II.  Plaintiff fails to satisfy his burden on the 2^nd step of SLAPP as to the malice element of malicious prosecution

            Once defendant demonstrates that a cause of action arises from protected conduct, the plaintiff must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.  See Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89.  “Precisely because the statute (1) permits early intervention in lawsuits alleging unmeritorious causes of action that implicate free speech concerns, and (2) limits opportunity to conduct discovery, the plaintiff's burden of establishing a probability of prevailing is not high: We do not weigh credibility, nor do we evaluate the weight of the evidence. Instead, we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law.  Only a cause of action that lacks ‘even minimal merit' constitutes SLAPP.”  See Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699.

“The second prong of the statute deals with whether the plaintiff has “demonstrated a probability of prevailing on the claim.  Under section 425.16, subdivision (b)(2), the superior court, in making these determinations, considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’ For purposes of an anti-SLAPP motion, the court considers the pleadings and evidence submitted by both sides, but does not weigh credibility or compare the weight of the evidence. Rather, the court's responsibility is to accept as true the evidence favorable to the plaintiff.  A plaintiff need only establish that his or her claim has minimal merit to avoid being stricken as a SLAPP.  With these descriptions in mind, we will not strike a cause of action under the anti-SLAPP statute unless it lacks even minimal merit.”  Ralphs Grocery Co. v. Victory Consultants, Inc. (2017) 17 Cal.App.5th 245, 261.

The “probability of prevailing” is tested by the same standard governing a motion for summary judgment, nonsuit, or directed verdict.  Thus, in opposing a SLAPP motion, it is plaintiff's burden to make a prima facie showing of facts that would support a judgment in plaintiff's favor.  See Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 785; Taus v. Loftus (2007) 40 Cal.4th 683, 714 (a “summary-judgment-like procedure”).    

            A.  Elements of malicious prosecution

            “To establish a cause of action for malicious prosecution, a plaintiff must demonstrate that the prior action (1) was initiated by or at the direction of the defendant and legally terminated in the plaintiff's favor, (2) was brought without probable cause, and (3) was initiated with malice.”  Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 740.

B.  Favorable termination

The prior action terminated after the Court granted Plaintiff’s motion for nonsuit on 7-30-21.  See Opposition, Dec. of K. Grossbart, ¶18.  Judgment was entered in the prior action in Plaintiff’s favor on 11-2-21.  Id.  Plaintiff establishes the element of favorable termination.

            C.  Probable cause

“Probable cause is present unless any reasonable attorney would agree that the action is totally and completely without merit.  This permissive standard for bringing suits, and corresponding high threshold for malicious prosecution claims, assures that litigants with potentially valid claims won't be deterred by threat of liability for malicious prosecution.” Roberts v. Sentry Life Ins. (1999) 76 Cal.App.4th 375, 382 (emphasis added).  “If the court determines that there was probable cause to institute the prior action, the malicious prosecution action fails, whether or not there is evidence that the prior suit was maliciously motivated.”  Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 886.  The probable cause determination depends on what was known by the litigant or attorney at the relevant time, either when the action was filed or when the malicious prosecution plaintiff asserts prosecution of the action became ‘malicious.’”  See Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 868; Zamos v. Stroud (2004) 32 Cal.4th 958, 973 (malicious prosecution action includes continuing to prosecute a lawsuit discovered to lack probable cause). 

            There are two distinct methods of demonstrating that an action lacked probable cause.  Lack of probable cause may be established by demonstrating that (1) the action was legally untenable based on the facts known to the defendant, a pure question of law for the Court; or (2) the action was legally untenable because the defendant did not have a good faith, reasonable belief in the facts upon which the case was based, defendant’s good faith belief being a question of fact for the jury and the ultimate determination of lack of probable cause based on that jury finding being a question of law for the Court.  See Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50; Sheldon Appel, supra, 47 Cal.3d at 880; Sierra Club Foundation v Graham (1999) 72 Cal.App.4^th 1135, 1154; Sangster v. Paetkau (1998) 68 Cal.App.4^th 151, 164-165 (litigant lacks probable cause where he “relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him”); Hufstedler, Kaus & Ettinger v. Supr. Ct. (1996) 42 Cal.App.4^th 55, 63-64 (distinguishing between allegation that probable cause did not exist to sue for defamation because statements were nonactionable opinions and allegation that probable cause did not exist because defendant knew claims was false or untrue).

            Defendants alleged a claim of financial elder abuse against Plaintiff in the underlying action.  Financial elder abuse “occurs when a person or entity does any of the following: (1) [t]akes, secretes, appropriates, obtains, or retains real or personal property of an elder ... for a wrongful use or with intent to defraud, or both[;] [¶] (2) [a]ssists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder ... for a wrongful use or with intent to defraud, or both[; or] [¶] (3) [t]akes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder ... by undue influence ....”  Welf. & Inst. Code §15610.30(a)(1)-(3). 

“A person or entity shall be deemed to have taken, secreted, appropriated, obtained, or retained property for a wrongful use if, among other things, the person or entity takes, secretes, appropriates, obtains, or retains the property and the person or entity knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.”  Welf. &Inst. Code, §15610.30(b).  Liability for elder abuse may be imposed, even in the absence of an intent to defraud, “if it can be shown that the person took the property for a wrongful use and ‘knew or should have known that [his or her] conduct is likely to be harmful to the elder ....”  Bonfigli v. Strachan (2011) 192 Cal.App.4th 1302, 1315.

Plaintiff argues Defendants lacked probable cause to sue him for elder abuse and to continue litigating the case against him, because Defendants did not have any evidence of fraudulent intent, i.e. Plaintiff’s knowledge that the pipeline ran underneath the house.  Plaintiff argues there was no “smoking gun” establishing the scienter element of Defendants’ elder abuse claim, and the absence of such a smoking gun was expressly acknowledged by Judge Epstein in the prior action and known to Defendants before they filed the elder abuse action.  See Plaintiff’s Opposition, Dec. of K. Grossbart, Ex. H,  349:12-28, 354:22-25; Ex. K, Email by Sall to Scott dated 1-17-16.  Based on the lack of any evidence of fraud, not just “smoking gun” evidence, Judge Epstein granted Plaintiff’s motion for nonsuit in the underlying action.  Id. at 355:2-12. 

As detailed by Judge Epstein, Defendants failed to present any evidence at trial that Plaintiff knew there was a pipeline running underneath the house prior to close of escrow.  Prior to filing the elder abuse claim, Defendants conducted their own investigation regarding whether Plaintiff discovered existence of the pipeline when their pool permit was rejected.  This investigation failed to establish such knowledge. 

“The question of probable cause is whether as an objective matter, the prior action was legally tenable or not.  A litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.  In a situation of complete absence of supporting evidence, it cannot be adjudged reasonable to prosecute a claim.”  Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292.

Judge Epstein expressly stated that he believed “Mr. Sall believes that there’s evidence that shows that [Plaintiff’s knowledge of the pipe going underneath the property], but I haven’t seen it, and it didn’t come out so far in the trial.”  See Dec. of B. Bailey, Ex. J, 350:6-19.  Based on Judge Epstein’s assessment of Defendants’ evidence at trial, Defendants had no evidence of fraudulent intent.  At the very least, Defendants did not have probable cause to continue litigating their elder abuse claim against Plaintiff to trial.  Judge Epstein found that there was absolutely no evidence of fraudulent intent, either “smoking gun” or otherwise.  See Plaintiff’s Opposition, Dec. of K. Grossbart, Ex. H,  349:12-28, 354:22-25; Ex. K, Email by Sall to Scott dated 1-17-16.  On that basis, Plaintiff satisfies his low burden on the second step of SLAPP as to the probable cause element of malicious prosecution.

            D.  Malice

            “The malice element of the malicious prosecution tort relates to the subjective intent or purpose with which the defendant acted in initiating the prior action.  The malice required in an action for malicious prosecution is not limited to actual hostility or ill will toward the plaintiff but exists when the proceedings are instituted primarily for an improper purpose.   Although lack of probable cause alone does not automatically equate to a finding of malice, it is a factor that may be considered.  Malice may still be inferred when a party knowingly brings an action without probable cause.”  Ross v. Kish (2006) 145 Cal.App.4th 188, 204 (SLAPP motion to malicious prosecution action properly denied where plaintiff presented evidence that defendant instituted prior action knowing claims asserted lacked factual and legal support and defendant was unhappy that plaintiff was attempting to collect fees). 

“Merely because the prior action lacked legal tenability, as measured objectively without more, would not logically or reasonably permit the inference that such lack of probable cause was accompanied by the actor's subjective malicious state of mind.”  Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 743.

“The ‘malice’ element of the malicious prosecution tort relates to the subjective intent or purpose with which the defendant acted in initiating the prior action, and past cases establish that the defendant's motivation is a question of fact to be determined by the jury.”  Sheldon Appel, supra, at 874.  Thus, malice is “always a question for the jury.”  Id. at 875.  "Because direct evidence of malice is rarely available, malice is usually proven by circumstantial evidence and inferences drawn from the evidence."  Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1543.

            “Malice may range anywhere from open hostility to indifference; it is not limited to ill will toward plaintiff but exists when the proceedings are prosecuted primarily for an improper purpose.”  Medley Capital Corp. v. Security National Guaranty, Inc. (2017) 17 Cal.App.5th 33, 48. 

“Suits with the hallmark of an improper purpose are those in which: (1) the person initiating them does not believe that his claim may be held valid; (2) the proceedings are begun primarily because of hostility or ill will; (3) the proceedings are initiated solely for the purpose of depriving the person against whom they are initiated of a beneficial use of his property; (4) the proceedings are initiated for the purpose of forcing a settlement which has no relation to the merits of the claim.”  Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1157 (quoting Albertson v. Raboff (1956) 46 Cal.2d 375, 383. 

            Plaintiff fails to present evidence of Defendants’ malice.  Judge Epstein found that Defendants’ evidence of fraudulent intent was legally insufficient, but he also stated he believed that Defendants genuinely believed that there was such evidence.  Defendants continue to maintain that Plaintiff’s knowledge of the pipeline underneath the house could be inferred from (1) Plaintiff’s admission that he saw the aboveground portion of the pipe behind the house; (2) Plaintiff’s decision to erect a fence hiding the aboveground portion of the pipe from view when standing in the backyard of the house; and (3) the fact that the aboveground portion of the pipe emerged from underneath the subject property. 

            Plaintiff submits evidence that Defendants filed the elder abuse action against him in hopes of obtaining a large settlement to compensate them for the financial disaster that resulted from purchasing the subject property.  See Motion, Exs. K, O, P.  Plaintiff also submits evidence that Sall admitted they had been unable to locate evidence demonstrating Plaintiff’s “absolute knowledge of the pipe.”  See Motion, Ex. O, Email to Shayne Scott dated 5-19-16. 

None of this evidence establishes malice, i.e. initiation of a legal action for an improper purpose.  Filing an action to obtain a settlement is not improper.  Filing a lawsuit for the purpose of forcing a settlement bearing no relation to the merits of the claim is improper.  There is no evidence that Defendants were attempting to obtain a settlement unrelated to the merits of the claim.   See Sierra Club Foundation, supra, 72 Cal.App.4th at 1157.  

In addition, an improper purpose is not established by Defendants’ failure to obtain “smoking gun” evidence of Plaintiff’s knowledge based on the denial of Plaintiff’s request for a pool permit.  The lack of “smoking gun” evidence does not establish that Defendants had no reasonable basis to believe in the validity of their claim.  Moreover, the pool permit was only one potential avenue to obtain such evidence. 

            Plaintiff fails to submit any evidence that would support a finding of malice.  For this reason, the SLAPP Motion is GRANTED. 

III.  Attorney’s Fees

            Defendants request attorney’s fees as prevailing parties under CCP §425.16(c).  However, they fail to request a specific amount or submit any evidence in support of an award of fees, e.g. billing entries or a declaration attesting to amount of fees incurred.